Making Your CSM Study a Key Driver of Your CVM Programme

In 1999 a major US study published in the HBR (“The Economics of Customer Satisfaction” by DiCostanzo, Larson & Sasser) showed that there was a strong and measurable link between current customer satisfaction and subsequent customer profitability for customers of the US-based PNC bank. Their review found that customers who were “Highly Satisfied” when surveyed in 1996 became on average more loyal and more valuable over the next three years than other customers. Moreover, the findings were highly statistically significant and were not being driven by the influence of any third factor. This was a strong and conclusive finding.

Others, however, have found it more difficult to determine that such relationships exist. Reinartz and Kumar, for example, in an article in the HBR published in 2002 (“The Mismanagement of Customer Loyalty”) found that if such relationships exist then they are “much weaker – and subtler – than proponents of loyalty programs claim”. Despite these apparent conflicts, the principle logic seems clear. Satisfied customers become loyal customers and loyal customers become more valuable to us. Why then are people finding it difficult to confirm these relationships on a general basis? The answer is failing to understand customer motivations. Find out more here.

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From CSM to CVM.pdf
From CSM to CVM.pdf